Husein Industries Limited Annual Report 2008 - 2009ep =O- lwihSe CORPORATE INFORMATION BOARD OF DIRECTORS Mr. Aziz L. Jamal Mz. Rashid L. Jamal Mr. Husein Jamal . Mrs. Aisha Bai Suleman Mr. Akhtar Wasim Dar Mr. Ahsan Jamal Miss. Hina Abdul Rashid BOARD OF AUDIT COMMITTEE Mr. Akhtar Wasim Dar Mr. Rashid L. Jamal Mr. Husein Jamal Mr. Mahmood-ul-Hassan Malik COMPANY SECRETARY Mr. M. Anwar Kaludi REGISTERED & HEAD OFFICE HT-8, Landhi Industrial & Trading Estate, Landhi, Karachi-75120. Tel: (9221) 5018536-8 Fax: (9221) 5018545 E-mail: sales@husein.com BANKERS Habib Metropolitan Bank Limited Habib Bank Limited AUDITORS Hyder Bhimji & Co. Chartered Accountants MILLS Landhi Industrial & Trading Estate, Landhi, Karachi-75120. Chairman/Chief Executive Director Director Director Director Director Director Chairman Member Member SecretaryZASNY sh NOTICE OF MEETING Notice is hereby given that the 56th Annual General Meeting of the shareholders of Husein Industries Limited will be held at the Registered Office of the Company at Plot No. HT-8, Landhi Industrial & Trading Estate, Landhi, Karachi, on Saturday 31, October 2009 at 03:30 p.m to transact the following business. : Ordinary Business 1. To confirm the minutes of the 55th Annual General Meeting held on October 31, 2008. 2. To receive, consider and adopt the Financial Statement of the Company for the year ended 30 June, 2008 together with the Directors and auditors Report thereon. 3. To appoint auditors and fix their remuneration for the year ending 30 June 2010. The retiring auditor M/s Hyder Bhimji & Co., Chartered Accountants, retire and offer themselves for reappointment. To transact any other business as may be placed before the Meeting with the permission of the Chair. By order of the Board Mohammad Anwar Kaludi Karachi : Company Secretary NOTES : 1. The Register of Members of the Company will remain closed from 28th October 2009 to 3rd November 2009 (both days inclusive). 2. Members are requested to notify immediately changes, if any, in their registered addresses. 3. Non-Muslim shareholders are advised to submit application on plain paper for non-deduction of Zakat. 4. Central Depository Company account holders will further have to follow the under mentioned guidelines as laid down by the Securities and Exchange Commission of Pakistan. A. For attending the Meeting: In case of individuals, the account holder or sub-account holder and / or the person whose securities are in group account and their registration details are uploaded as per the Regulations, shall authenticate his/her identity by showing his/her Original Computerized National Identity Card (CNIC) or original passport at the time of attending the Meeting. 2. In case of corporate entity, the Board of Directors resolution / power of attorney with specimen signature of the nominee shall be produced (unless it has been provided earlier) at the time of the Meeting. B. For appointing proxies: In case of individuals, the account holder or sub-account holder and / or the person whose securities are in-group account and their registration details are uploaded as per the Regulations shal] submit the proxy form as per the above requirements. 2. The proxy form shall be witnessed by two persons whose names, addresses and CNIC numbers shall be mentioned on the form. 3. Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy form. 4. The proxy shall produce his/her original CNIC or original passport at the time of the Meeting. =VISION To earn the reputation of reliable manufacturer of top quality textile made-ups to the target market. MISSION : To achieve market leadership through technological innovation, distinguished by quality, services, customer satisfaction and an adequate return to share holders.raid A DIRECTORS’ REPORT TO THE SHARE HOLDERS DIRECTORS’ REPORT In the name of Allah the Most Merciful and the Most Benevolent. Your Directors take pleasure in presenting 56th Annual Report and the Audited Financial Statements for the year ended June 30, 2009. OPERATING AND FINANCIAL RESULTS Operating results of the company are noted below. Rupees Sales-Net 1,395,273,266 Cost of sales , 1,167,447,346 Gross Profit 227,825,920 Selling & Distribution Cost 27,444,640 Administrative Expenses 26,908,671 54,353,311 Operating profit 173,472,609 Finance Costs 160,852,042 Other Operating Expenses 1,026,858 161,878,900 Other Operating Income 2,048,821 Profit before taxation 13,642,530 Taxation (25,793,914) Loss after Taxation (12,151,384) Loss per share (Basic and diluted) (1.14) The year under review remained very difficult year for the textile industry. The all time high inflation due to increase in Raw Material prices adversely affected the economy globally. The profit before taxation was Rs. 13,642,530 for the year under review. During the year under review, financial costs increased due to higher interest rates in this difficult environment all efforts are being made to control costs. FUTURE PROSPECTS The management of your company is striving very hard to control the situation by efficient and economical operations. It is hoped that favourable movement in exchange rate, reduction in mark up rates and cost cutting measures would considerably improve the bottom line in future. DIVIDEND Due to loss after taxation the company has not declared any Dividend. EXTERNAL AUDITORS The present Auditors M/s. Hyder Bhimji & Company, Chartered Accountants, retire and offer themselves for reappointment. RELATED PARTY TRANSACTIONS There were no transactions with related parties and with key management personnel. Remuneration of the key management personnel is disclosed in note 36. All the remuneration were reviewed and approved by the audit committee as well as the Board of Directors of the Company.EARNING PER SHARE The Loss per share of the company stood at Rs.(1.14) 2008: Rs. (1.70). Your Directors are pleased to record their appreciation for the continued dedication, commitment and loyalty of the employees of your company. Your Directors also appreciate the assistance and continued support of the various Government Departments and Bankers. . STATEMENT ON CORPORATE AND FINANCIAL FRAME WORK The Directors of the Company are well aware of their responsibilities under the Code of Corporate Governance incorporated in the Listing Regulations of the stock exchanges where the Company is listed. All necessary steps are being taken to ensure Good Corporate Governance in the Company as required by the Code. a) The Financial Statements, prepared by the Management of the Company, present fairly its state of affairs, the result of its operations, cash flows and changes in equity. b) Proper books of account of the Company have been maintained. c) Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment. d) International Accounting Standards, as applicable in Pakistan, have been followed in preparation of financial statements and there has no material departure there from. e) The system of internal control is sound in design and has been effectively implemented and monitored. f) We have an Audit Committee, majority of the members of which are amongst non-executive directors of Board. g) There are no significant doubts upon the Company's ability to continue as a going concern. h) There has been no material departure from the best practices of corporate governance as detailed in listing regulations. i) The Board of Directors has adopted a mission statement and statement of overall corporate strategy. ) We have prepared and circulated a Statement of Ethics and Business Practices among directors and employees. k) There are no overdue taxes, duties, levies and charges as on 30th June, 2009. 1) There are no funds based provident, gratuity and pension fund schemes. m) KEY OPERATING AND FINANCIAL DATA Key operating and financial data for last six years is summarized on page No. 46. n) BOARD MEETING HELD DURING THE YEAR During the year meetings of the Board of Directors were held. Attendance by each Director is given on page No. 45. ACKNOWLEDGEMENT I would like to thanks Company's shareholders, financial institutions and customers for their continued co-operation and support. I would like to share my deepest appreciation for our employees for the dedication and hardwork. for and On behalf of the Board Aziz L. Jamal Karachi: October 10, 2009 Chairman & Chief ExecutiveAUDITORS’ REPORT TO THE MEMBERS We have audited the annexed Balance Sheet of HUSEIN INDUSTRIES LIMITED as at June 30, 2009 and the related Profit and Loss Account, Cash Flow Statement and Statement of Changes in Equity together with the notes forming part thereof, for the year then ended and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit. It is the responsibility of the Company's management to establish and maintain a system of internal control, and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. An audit includes examining, on a test basis evidence supporting the amounts and disclosures in the above said statements. An audit also includes assessing the accounting policies and significant estimates made by management, as well as, evaluating the overall presentation of the above said statements. We believe that our audit provides a reasonable basis for our opinion and, after due verification, we report that: a). in our opinion, proper books of accounts have been kept by the Company as required by the Companies Ordinance, 1984; b). in our opinion: i) the Balance Sheet and Profit and Loss Account together with the notes thereon have been drawn up in conformity with the Companies Ordinance, 1984 and are in agreement with the books of account and are further in accordance with the accounting policies consistently applied; ii). the expenditure incurred during the year was for the purpose of the Company's business, and iii). the business conducted, investments made and the expenditure incurred during the year were in accordance with the objects of the Company. ¢) in our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet and Profit and Loss Account, Cash Flow Statement and Statement of Changes in Equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan, and give the information required by the Companies Ordinance, 1984, in the manner so required, and respectively give a true and fair view of the state of the Company's affairs as at June 30, 2009 and of the loss, its cash flows and changes in equity for the year then ended; and d). in our opinion, no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980). HYDER BHIMJI & CO. CHARTERED ACCOUNTANTS ENGAGEMENT PARTNER: MOHAMMAD HANIF RAZZAK Karachi: October 10, 2009STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE The Company has applied the principles contained in the Code in the following manner: 1. The Company encourages representation of independent non-executive directors and directors representing minority interests on its Board of Directors. . The directors have confirmed that none of them is serving as a director in more than ten listed companies, including this Company. All the resident directors of the Company are registered as taxpayers and none of them has defaulted in payment of any loan to a banking company,a DFI or an NBEFI or, being a member of a stock exchange, has been declared as a defaulter by that stock exchange. No casual vacancy has occurred in the Board during the year. The Company has prepared a ‘Statement of Ethics and Business Practices’, which has been signed by all the directors and employees of the Company. The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the Company. A complete record of particulars of significant policies along with the dates on which they were approved or amended has been maintained. All the powers of the Board have been duly exercised and decisions on material transactions, including appointment and determination of remuneration and terms and conditions of employment of the Chief Executive Officer (CEO) and other executive, have been taken by the Board. The meetings of the Board were presided over by the Chairman and, in his absence, by a director elected by the Board for this purpose and the Board met at least once in every quarter. Written notices of the Board meetings, along with agenda and working papers, were circulated at least seven days before the meetings. The minutes of the meetings were appropriately recorded and circulated. The directors of the Husein Industries Limited are professionally qualified and experienced persons and are well aware of their duties and responsibilities. Further the director have also attend talks, workshops and seminars on the subject of Corporate governance. The Board has approved appointment of Chief Financial Officer (CFO), Company Secretary and Head of Internal Audit, including their remuneration and terms and conditions of employment, have been duly approved by the Board. The directors’ report for this year has been prepared in compliance with the requirements of the Code and fully describes the salient matters required to be disclosed. The financial statements of the Company were duly endorsed by CEO and CFO before approval of the Board.The directors, CEO and executives do not hold any interest in the shares of the Company other than that disclosed in the pattern of shareholding. The Company has complied with all the corporate and financial reporting requirements of the Code. - The Board has formed an audit committee. It comprises of three members, including the Chairman of the Committee, two of whom are non-executive directors. The meetings of the audit committee were held at least once every quarter prior to approval of interim and final results of the Company and as required by the Code. The terms of reference of the committee have been formed and advised to the committee for compliance. The Board has set-up an effective internal audit function who are considered suitably qualified and experienced for the purpose and are conversant with the policies and procedures of the Company and they are involved in the internal audit function on a full time basis. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the quality control review programme of the Institute of Chartered Accountants of Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the Company and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by Institute of Chartered Accountants of Pakistan. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard. We confirm that all other material principles contained in the Code including the requirements of newly inserted clause (xiii a) relating to related party transacions have duly been complied with. Aziz L. Jamal Karachi :October 10, 2009 Chairman & Chief ExecutiveHUSEIN REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE WITH BEST PRACTICES OF THE CODE OF CORPORATE GOVERNANCE We have reviewed the Statement of Compliance with the best practices contained in the Code of | Corporate Governance for the year ended June 30, 2009 prepared by the Board of Directors of HUSEIN INDUSTRIES LIMITED to comply with the Listing Regulations of the respective Stock Exchanges, where the Company is listed. The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Company. Our responsibility is to review, to the extent where such compliance can be objectively verified, whether the Statement of Compliance reflects the status of the Company's compliance with the provisions of the Code of Corporate Governance and report if it does not. A review is limited primarily to inquiries of the Company personnel and review of various documents prepared by the Company to comply with the Code. As part of our audit of financial statements we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. We have not carried out any special review of the internal control system to enable us to express an opinion as to whether the Board's statement on internal control covers all controls and the effectiveness of such internal controls. Further, Sub-Regulation (xiii a) of Listing Regulations 35 (Previously Regulation No.37) notified by The Karachi Stock Exchange (Guarantee) Limited vide circular KSE/N-269 dated January 19, 2009 requires the Company to place before the board of directors for their consideration and approval of related party transactions distinguishing between transactions carried out on terms equivalent to those that prevailed in arm's length transactions and transaction which are not executed at arm's length price recording proper justification for using such alternate pricing mechanism. Further, all such transactions are also required to be separately placed before the audit committee. We are only required and have ensured compliance of requirement to the extent of approval of related party transactions by the board of directors and placement of such transactions before the audit committee. We have not carried out any procedures to determine whether the related party transactions were undertaken at arm's length price or not. Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Company's compliance, in all material respects, with the best practices contained in the Code of Corporate Governance, as applicable to the Company for the year ended June 30, 2009. Karachi : October 10, 2009 HYDER BHIMJI & CO. Chartered AccountantsBALANCE SHEET June 30, June 30, 2009 2008 Note Rupees Rupees SHARE CAPITAL AND RESERVES: Authorised capital 15,000,000 ordinary shares of Rs. 10 each 150,000,000 150,000,000. Issued, subscribed and paid-up capital 4 106,258,520 106,258,520 Reserves 5 278,539,358 291,145,815 384,797,878 397,404,335 Long term loans 6 248,817,578 133,878,270 Deferred liabilities 7 28,317,655 11,058,360 CURRENT LIABILITIES: Trade and other payables 8 316,842,221 609,827,074 Accrued Mark-up 9 35,491,232 12,238,337 Short-term borrowings 10 899,683,135 707,844,686 Current maturity of long-term loans 11 99,754,692 84,448, 692 Taxation 13,310,036 14,073,975 1,365,081,316 1,428,432,764 Contingencies & Commitments 12 - - 2,027,014,427 1,970,773,729 Impairment loss on listed equity security classified as available for sale aggregating to Rs.455,073 has not been recognized in the profit & loss account using the option provided in S.R.O.150(1)/2009 dated February 13,2009.Had the impariment loss been recognized in the profit & loss account,the loss would have been higher by Rs.455,073 The annexed notes (1 to 42) form an integral part of these financial statements. 10AS AT JUNE 30, 2009 NON CURRENT ASSETS: Property, plant and equipment Deferred Tax Long Term Investments Long Term Deposits CURRENT ASSETS: Stores, spare parts and loose tools Stock-in-trade Trade debts Loans & Advances Trade Deposits & Short Term Prepayments Other Receivables Tax refunds due from government Cash and bank balances Aziz L. Jamal Chairman & Chief Executive June 30, June 30, 2009 2008 Note Rupees Rupees 13 442,834,248 465,285,028 14 - 2,326,039 15 475,929 931,002 16 9,313,681 9,973,108 17 51,807,962 49,597,078 18 797,817,277 801,381,180 19 614,060,208 554,540,463 20 50,692,436 38,908,665 21 2,337,224 917,207 22 13,496,394 8,165,652 23 42,873,051 34,511,465 24 1,306,017 4,236,842 1,574,390,569 1,492,258,552 2,027,014,427 1,970,773,729 Akhtar Wasim Dar Director 11PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2009 June 30, June 30, 2009 2008 Note Rupees Rupees Sales-Net 25 1,395,273,266 1,089,447,335 Cost of sales 26 1,167,447,346 939,386,563 Gross profit 227,825,920 150,060,772 Selling & distribution Cost 27 27,444,640 32,754,488 Administrative expenses 28 26,908,671 23,171,745 54,353,311 55,926,233 Operating profit 173,472,609 94,134,539 Finance cost 29 160,852,042 110,632,894 Other Operating Expenses 30 1,026,858 - 161,878,900 110,632,894 Other operating income 31 2,048,821 198,442 Profit / (Loss) before taxation 13,642,530 (16,299,913) Taxation 32 (25,793,914) (1,777,412) Loss after taxation (12,151,384) (18,077,325) Loss per share (basic and diluted) 33 (1.14) (1.70) Impairment loss on listed equity security classified as available for sale aggregating to Rs.455,073 has not been recognized in the profit & loss account using the option provided in S.R.O.150(1)/2009 dated February 13, 2009.Had the impariment loss been recognized in the profit & loss account,the loss would have been higher by Rs.455,073 The annexed notes (1 to 42) form an integral part of these financial statements. Akhtar Wasim Dar Director Aziz L. Jamal Chairman & Chief Executive 12CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2009 Note CASH FLOW FROM OPERATING ACTIVITIES: Cash generated from operations 34 Staff gratuity paid Financial charges paid Taxes paid Long-term deposits Net cash (outflow)/inflow from operating activities CASH FLOW FROM INVESTING ACTIVITIES: Fixed capital expenditure Proceeds from disposal of fixed assets Dividend received Net cash outflow from investing activities CASH FLOW FROM FINANCING ACTIVITIES: Short-term borrowings less repayments Long-term loan less repayments Dividends paid Net cash inflow from financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 35 The annexed notes (1 to 42) form an integral part of these financial statements. Aziz L. Jamal Chairman & Chief Executive 13 June 30, 2009 Rupees (146,484,940) (1,042,114) (137,599,147) (7,520,748) 659,427 (291,987,522) (46,015,604) 12,959,000 (33,027,060) June 30, 2008 Rupees 229,376,231 (3,024,026) (109,766,925) (6,525,724) 104,800 110,164,356 (28,629,055) 450,000 25,433 (28,153,622) 200,772,453 (49,089,123) 130,245,308 (69,448,692) - (431,643) 331,017,761 (118,969,458) 6,003,179 (36,958,724) (169,859,511) (132,900,787) (163,856,332) (169,859,511) Akhtar Wasim Dar DirectorSTATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 2009 Capital reserves Share Tax Share Revenue Accumulated Unrealised Total Capital holiday premium reserve - profit/(loss) gain / (loss) on general long-term investments wn ee ne ne ee ee eee Rupees -------------+--------- 202 ---------- 22 Balance at July 01, 2006 106,258,520 7,040,000 26,817,517 292,142,483 1,079,816 469,844 433,808,180 Net loss for the year ended June 30, 2007 - - ‘- - (18,758,154) - (18,758,154) Unrealized gain due to change in fair value of investments - - “ - - 478,596 478,596 a Balance as at June 30, 2006 106,258,520 7,040,000 26,817,517 292,142,483 (17,678,338) 948,440 415,528,622 Net loss for the year ended June 30, 2008 - - - - (18,077,325) - (18,077,325) Unrealized loss due to change in fair value of investments - - - - - (46,962) (46,962) Balance as at June 30,2008 106,258,520 7,040,000 26,817,517 292,142,483 = (35,755,663) 901,478 397,404,335 _ Balance as at July 01,2008 106,258,520 7,040,000 26,817,517 292,142,483 (35,755,663) 901,478 397,404,335 Net Loss for the year ended June 30, 2009 - - - - (12,151,384) - (12,151,384) Unrealized loss due to change in fair value of investments - - - - - (455,073) (455,073) Balance at June 30, 2009 106,258,520 7,040,000 26,817,517 292,142,483 (47,907,047) 446,405 384,797,878 oo eeeeeeE——eEEeeee———eEEeeeEeeeEEE The annexed notes (1 to 42) form an integral part of these financial statements. Aziz L. Jamal Akhtar Wasim Dar Chairman & Chief Executive Director 14NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2009 1. 2.3 LEGAL STATUS AND OPERATIONS: The Company was incorporated in Pakistan on May 25, 1953 as a public limited company under the name of Husein Textile Mills Limited, which was changed to Husein Industries Limited in 1964. Its shares are listed on Karachi Stock Exchange in Pakistan. The major activities of the Company are textile manufacturing, producing cotton arid polyester yarn, cloth and garments which are marketed within and outside Pakistan. Its registered office is situated in HT-8, Landhi Industrial & Trading Estate, Karachi, Sindh. Statement of compliance: These financial statements have been prepared in accordance with the accounting standards as applicable in Pakistan and the requirements of the Companies Ordinance, 1984. Approved accounting standards comprise of such International Accounting Standards (IASs) & IFRS as notified under the provisions of the Companies Ordinance,1984. Wherever the requirements of the Companies Ordinance, 1984 or the directives issued by the Securities and Exchange Commission of Pakistan (SECP) differ with the requirements of these standards, the requirements of the Companies Ordinance, 1984 or the requirements of the said directives take precedence. The preparation of financial statements in conformity with International Accounting Standards requires the use of certain accounting estimates. It also requires the management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 38 to these financial statements. Standards, amendments to published approved accounting standards and interpretations becoming effective in the year ended June 30, 2009: the following standards, interpretations and amendments to existing standards have been published that are mandatory and relevant for the company's accounting period beginning on July 1, 2008. IFRS 7, 'Financial instruments: Disclosures’ introduces new disclosures relating to financial instruments and does not have any significant impact on the classification and valuation of the financial instruments other then disclosures. Standards, interpretations and amendments to published approved accounting standards that are not yet effective: The following standards, amendments and International Financial Reporting Interpretations Committee (IFRIC) interpretations to existing standards have been published and are mandatory for accounting periods beginning on or after January 1, 2009: IAS 1 (Revised), 'Presentation of Effect from accounting period financial statements' beginning on or after January 01, 2009 IAS 7 (Ammendments), ‘Statements Effect from accounting period of cash flows' beginning on or after January 01, 2009 IAS 12 Income taxes (Amendments) Effect from accounting period beginning on or after January 01, 2009 1AS 16 Property,plant equipment Effect from accounting period (Amendments) beginning on or after January 01, 2009 JAS 18 Revenue (Ammendments) Effect from accounting period beginning on or after January 01, 2009 15IAS 19 (Amendments), ‘Employee benefits’ IAS 20 Government grants and disclosure of government assistance IAS 21 The effects of changes in foreign exchange rate (Amendmente) [AS-23 (Amendment) Borrowing Cost 1AS-27 Consolidated and separate financial statements (Amendments) IAS-28 (Amendments), ' Investments in associates’ [AS-31 Interest in joint ventures (Amendments) IAS-32 Financial Instruments : Presentation (Amendments) IAS-33 Earnings per share (Amendments) [AS-34 Interim financial reporting (Amendments) LAS 36 (Amendment), ‘Impairment of assets’ IAS 38 (Amendment) ‘Intangible assets’ IAS 39 Financial Instuments : Recognition and measurment (Amendments) LAS 40 Investnebts property (Amendments) IAS 41 Agriculture (Amendments) IFRS-1 First time adoption of IFRS (Revised) IFRS-2 Share based Payment (Amendments) IFRS-2 Group Cash Settled Share-based Payment 16 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after July 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after July 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009SIGNIFICANT ACCOUNTING POLICIES: Basis of preparation: These financial statements have been prepared on the basis of ‘historical cost’ convention, except for available for sale investments which have been recognized at fair value and recognition of staff retirement benefits at present value. Retirement benefits: The Company operates an unfunded gratuity scheme covering all its employees who have completed one year of service with the Company. Gratuity is based on employees’ last drawn salary. Provisions are made to cover the obligations under the scheme on the basis of actuarial valuation and are charged to income. The most recent valuation was carried out as of June 30, 2009 using the “Projected Unit Credit Method”. Empolyee compensated absences The Company provides for compensated absences for all eligible employees in the year in which these are earned in accordance with the rules of the Company. Taxation: Current Provision for current taxation is based on the taxable income for the year determined in accordance with the prevailing law for taxation on income. The charge for current tax is calculated using prevailing tax rates or tax rates expected to apply to the profit for the period if enacted. The charge for current tax also includes adjustments where considered necessary, to provision for tax made in previous years arising from assessments framed during the year for such years. Deferred Deferred tax is accounted for using the balance sheet liability method in respect of all temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of the taxable profit. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, unused tax losses and tax credits can be utilised. Deferred tax is calculated at the rates that are expected to apply to the period when the differences are reversed based on tax rates that have been enacted or substantively enacted by the balance sheet date. The change in deferred tax liability/assets is charged or credited in the profit for the current period. 17IFRS-3 Business combinations (Revised) IFRS-4 Insurance contracts (Amendments) IFRS-5 Non-current assets held-for-sale and discontinued operations (Ammendments) IFRS-7 Financial instruments : Disclosure (Ammendments) IFRS-8 Operating segments IFRIC-1 Change in existing decommissioning restoration and similar liablities (Amendments) IFRIC-2 Member's share in corporate entities and similar liabilities (Amendments) IFRIC-4 Determing whether an Arrangment contain IFRIC-12 Services concession arrangements IFRIC-13 Customer loyalty programmes IFRIC-14 The limit on defined benefit asset, minimum funding requirments and their interaction (Amendments) IFRIC-15 Accounting for agreements for the construction of real estate IFRIC-16 Hedges of net investment in a foreign operation IFRIC-17 Distribution of non-cash assets to owners IFRIC-18 Transfer of Assets from Customer Effect from accounting period beginning on or after July 01, 2009 Effect from accounting period, beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January O1, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after July 01, 2009 Effect from accounting period beginning on or after July 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after July 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after January 01, 2009 Effect from accounting period beginning on or after July 01, 2009 Effect from accounting period beginning on or after July 01, 2009 The company expects that the adoption of the above standards, amendments and interpretations will have no impact on its Financial Statements except disclosures. 183.5 3.6 3.6.1 3.7 3.8 3.9 els Provisions: Provisions are recognised in the balance sheet when the Company has a legal or constructive obligation as a result of a past event and it is probable that outflow of economic benefits will be required to settle the obligation. However, provisions are reviewed at each balance sheet date and adjusted to reflect current best estimate. Property, plant & equipment and depreciation: Owned Operating fixed assets except freehold land are stated at cost less accumulated depreciation. Freehold land and capital stores are stated at cost. Depreciation is charged to income applying the diminishing balance method except leasehold land on which depreciation is charged to income applying the straight line method. Depreciation on additions during the year is charged at half the applicable rate while no depreciation is charged on deletions during the year. Gains and losses on disposal of assets are included in income currently.Maintenance and normal repairs are charged to income as and when incurred. Major renewals and improvements are capitalised and the assets so replaced, if any, are retired. Long term investments: Available for sale Long term investments are classified as “Available for Sale” which represent investments which are not held for trading. All investments are initially recognised at cost, being the fair value of the consideration given. Subsequent to initial recognition, for investments traded in active market, fair value is determined by reference to quoted market price. Any gain or loss from a change in the fair value of investments available for sale is recognised directly in equity as unrealised, unless sold, collected or otherwise disposed off, or until the investment is determined to be impaired, at which time cumulative gain or loss previously recognised in equity is included in the profit and loss account for the year. Stores, spare parts and loose tools: These are valued at average cost except items in transit which are stated at invoice value plus other charges paid thereon. Obsolete and used items are recorded at nil value. Value of items are reviewed at each balance sheet date to record provision for any slow moving. Stock-in-trade: Stock-in-trade is valued at the lower of annual average cost and net realisable value except goods in transit which are stated at invoice values plus other charges paid thereon. Average cost in relation to semi-finished and finished goods represents direct cost of materials, direct wages and appropriate manufacturing overheads. Raw materials are valued at lower of weighted average cost and net realisable value. Net realisable value signifies the selling price in the ordinary course of business less cost necessary to be incurred in order to make the sale. Obsolete items are recorded at nil value. Provision is made for slow moving stocks where necessary. 193.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 Trade debts: Trade debts are stated at original invoice amount except export receivables are translated into Pak Rupee at the rates ruling on the balance sheet date or as fixed under contractual agreements. Provision for debts considered to be doubtful is reviewed on each balance sheet date. Bad debts are written off when identified. Impairment: The carrying amounts of the Company’s assets except for inventories are reviewed at each balance sheet date to determine whether there is any indication of impairment loss. If any such indication exists, the assets’ recoverable amount is estimated in order to determine the extent of the impairment loss, if any. Impairment losses are recognised as expense in profit and loss account. Foreign currency translation: All assets and liabilities in foreign currencies are translated at the rates of exchange prevailing at the balance sheet date. Transactions in foreign currency are translated into rupees at the rate of exchange prevailing at the date of transaction. Exchange gains and losses are included in income currently. Revenue recognition: Sale of goods and services are recognised on despatch of goods or on the performance of services. Dividend from Investments available for sale are recorded when right to receive has been established. Returns on deposits are recognised on accrual basis. Trade and other payables These are stated initially at fair value and subsequently measured at amortised cost using the effective interest rate method. Exchange gains and losses arising in respect of liabilities in foreign currency are added to the carrying amount of the respective liability. Cash and cash equivalents: Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of cash flow statement, cash and cash equivalents comprise balances with banks on current accounts and short term running finances under mark-up arrangements. Borrowings Borrowings are recognised initially at fair value, net of transaction cost incurred and are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the profit and loss account over the period of borrowings using the effective interest method. Related Party Transactions: The Company Enters into the related party transactions, if any, at arm's length prices determined in accordance with Comparable uncontrolled price method. 20lel 3.18 Financial assets and liabilities: All financial assets and liabilities are initially measured at cost, which is the fair value of the consideration given and received respectively. These financial assets and liabilities are subsequently measured ‘at fair value, amortised cost or cost, as the case may be. 3.19 Borrowing Costs: Borrowing costs are recognised as expense in the period in which they are incurred except to the extant that they are directly attributable to the assets acquired from the proceeds of such borrowings are capitalized up to the date of commissioning of respective fixed asset acquired. 3.20 Off setting Financial assets and financial liabilities are set off and net amounts is reported in the financial statements when there is a legally enforceable right to set off and the Company intends either to settle on net basis, or to realize the assets and settle the liabilities. 3.21. Dividend and appropriation to reserves: Dividend and appropriation to reserves are recognised in the financial statements in the period in which these are approved. 3.22 Provisions: Provisions are recognized when the company has a present obligation legal or constructive as a result of post event and it is probable that a out folow of recourse will be required to settle the obligation and reliable estimate of the amount can be made. 4, ISSUED, SUBSCRIBED AND PAID-UP CAPITAL: 2009 2008 2009 2008 Number of Rupees Rupees Shares 4,119,366 4,119,366 ordinary shares of Rs. 10 each allotted for consideration paid in cash 41,193,660 41,193,660 6,506,486 6,506,486 ordinary shares of Rs. 10 each allotted as fully paid bonus shares 65,064,860 65,064,860 10,625,852 10,625,852 106,258,520 106,258,520 Reserves Capital reserve - note 5.1 33,857,517 33,857,517 Unrealised gain on long-term investments 446,405 901,478 Reserves-revenue - note 5.2 292,142,483 292,142,483 Accumulated loss (47,907,047) (35,755,663) 244,235,436 256,386,820 278,539,358 291,145,815 5.1 This represents appropriation of Profit in past year against Share premium 5.2 This represents appropriation of Profit in past year to meet future exigency 21+a June 30, June 30, 2009 2008 Note Rupees Rupees 6. LONG TERM LOANS: (Secured) Long term finances utilized under mark-up arrangments from banking companies are as under Habib Metropolitan Bank Limited Long Term Finance - Export Oriented projects (LTF - EOP) I 6.1 33,858,000 42,326,000 Habib Metropolitan Bank Limited LTF-EOP II 6.2 64,901,000 81,127,000 Habib Metropolitan Bank Limited - Term Financel 6.3 15,555,558 24,444,446 Habib Metropolitan Bank Limited - Term Finance iI 6.4 9,257,712 15,429,516 Habib Metropolitan Bank Limited-Term Finance IH 6.5 225,000,000 55,000,000 348,572,270 218,326,962 Less Current maturity of long-term loan finance 11 99,754,692 84,448,692 248,817,578 133,878,270 6.1 The above financing facility is secured against the equtable mortgage over property of factory in the Landhi Industrial Area, karachi. The charge over property and machinery is registered.The markup on these facilities is charged as per SBP rate + 2% bank rate. The principal amount is repayable in 14 quarterly installments of Rs. 4.234 million in each quarter. Markup is charged on quarterly basis. During the year the State bank of Pakistan allows a grace period of one year on LTF - EOP financing scheme. 6.2 The above financing facility is secured against the equtable mortgage over property of factory in the Landhi Industrial Area, karachi. The charge over property and machinery is registered. The markup on these facilities is charged as per SBP rate + 2% bank rate. The principal amount is repayable in 14 quarterly installments of Rs. 8.113 million in each quarter. Markup is charged on quarterly basis. During the year the State bank of Pakistan allows a grace period of one year on LTF - EOP financing scheme. 6.3. The above financing facility is secured against the equtable mortgage over property of factory in the Landhi Industrial Area, karachi. The charge over property and machinery is registered. The markup on these facilities is charged as per 3 months KIBOR + 2%. The principal amount is repayable in 15 quarterly installments of Rs. 2.222 million in each quarter. Markup is charged on quarterly basis. 6.4 The above financing facility is secured against the equtable mortgage over property of factory in the Landhi Industrial Area, karachi. The charge over property and machinery is registered. The markup on these facilities is charged as per 3 months KIBOR + 2%. The principal amount is repayable in 15 quarterly installments of Rs. 1.543 million in each quarter. Markup is charged on quarterly basis. 6.5 The above financing facility is secured against the equtable mortgage over property of factory in the Landhi Industrial Area, karachi. The charge over property and machinery is registered. The markup on these facilities is charged as per 3 months KIBOR + 3%. The principal amount is repayable in 52 monthly installments of Rs. 5 million in each month. Markup is charged on quarterly basis. 22—___— Fe 7.1 7.1.1 7.2 23 June 30, 2009 Note Rupees DEFERRED LIABILITIES: Staff gratuity 7.1 11,636,140 Deferred taxation 7.2 16,681,515 28,317,655 Staff gratuity: Present value of defined benefit obligation 12,768,946 ‘Unrecognised actuarial losses/gains (1,132,806) Net liability at the end of the year 11,636,140 Net liability at the beginning of the year 11,058,360 Charge for the year 1,619,897 12,678,257 Benefits paid during the year 1,042,117 Net liability at the end of the year 11,636,140 Following significant assumptions have been made for the purpose of actuarial valuation: - Expected rate of increase in salary 13% p.a. - Discount rate 13% p.a. - Mortality rate EFU 61-66 mortality table - Withdrawal rate Age dependant Deferred taxation: Credit balance arising due to: - accrelated tax depreciation allowance 17,778,113 - Provision for staff gratuity (566,964) - Provision for slow moving items (529,634) Net deferred tax 16,681,515 TRADE AND OTHER PAYABLES: Trade Creditors 143,146,978 Accrued liabilities 13,658,012 Advances from customer Local 99,622,649 Foreign 15,551,694 115,174,343 Workers profit participation fund 8.1 733,470 Unclaimed dividend 44,129,418 316,842,221 ng > June 30, 2008 Rupees 11,058,360 11,058,360 13,410,028 (2,351,668) 11,058,360 13,410,028 672,358 14,082,386 3,024,026 11,058,360 484,839,721 11,814,127 69,043,808 69,043,808 44,129,418 609,827,074recon June 30, June 30, 2009 2008 Note Rupees Rupees 8.1 Workers’ Profit Participation Fund The movement in provision is as follows: Balance at the beginning of the year - - Add: Charge for the year 733,470 - Balance at the end of the year 733,470 - 9. ACCRUED MARK-UP: _ Local Currency — Mark-up accrued on long term loans 12,126,538 5,101,806 Mark-up accrued on short term borrowings 23,198,456 6,975,579 35,324,994 12,077,385 Foreign Currency Mark-up accrued on short term borrowings 166,238 160,952 35,491,232 12,238,337 10. SHORT-TERM BORROWINGS: - Secured: From banking companies In local currency: Running finance - under mark up arrangements 10.1 165,162,349 174,096,353 Export Refinance - preshipment 10.2 461,000,000 461,000,000 Finance against foreign bills 10.3 263,984,000 65,873,000 890,146,349 700,969,353 In foreign currency: Commercial loan 10.4 9,536,786 6,875,333 899,683,135 707,844,686 10.1 Short term running finances are secured by hypothecation of stock / receivables duly insured with usual Bank mortgage clause markup is paid on quarterly basis at the rate of 3 months KIBOR + 2%. The expiry of above finance is 31.03.2010 10.2 Export refinance preshipment is secured by receivables and lien on export documents.Markup is paid at the State Bank of Pakistan rate + 1% bank rate.The expiry of above finance is 31.03.2010 10.3 Finance against foreign bills is secured by export documents.Markup is paid at the rate of 3 months KIBOR+2%.The expiry of above finance is 31.03.2010 10.4 This represents outstanding balance against foreign currency finance equivalent to Rs.9.536 million Markup is paid quarterly @ BASE for US$ 9.5% + 0.75% per annum. 10.5 The aggregate amount of the financing facilities availed as at the balance sheet date were Rs. 899,683,135 against the financing facilities approved by the bank amounting to Rs. 1,038,750,000. 24June 30, June 30, 2009 2008 Note Rupees Rupees ‘11. CURRENT MATURITY OF LONG-TERM LOANS: Long-term loans utilised under markup arrangement 99,754,692 84,448,692 99,754,692 84,448,692 12. CONTINGENCIES AND COMMITMENTS Contingencies: The Company has no contingent liabilities in respect of any legal claims in the ordinary course of business. Commitments: Bank guarantee outstanding amounting to Rs. 55,317,770 (2008:55,317,770) in favour of Karachi Electric Supply Corporation & Sui Southeran Gas Company Limited. 13. PROPERTY, PLANT AND EQUIPMENT 13.1 Gross carrying value basis for the year 2009: DEPRECIATION Net book | Annual As at Additions/ As at For the As at value as at | rate of July 1, (deletions) June year June 30, June 30, 2008 2009 (deletions) 2009 2009 Freehold land 5,791,867 - 5,791,867 - - - 5,791,867 Leasehold land 23,538,355 - 23,538,355 2,197,598 235,384 2,432,982 21,105,373 1 Buildings on leasehold land 98,198,625 31,144,089 129,342,714 44,627,634 3,457,152 48,084,786 81,257,928 Plant, machinery and ancillary equipments 1,072,256,746 14,871,515 1,004,432,812 696,575,803 52,234,266 677,165,730 327,267,082 10-15 (82,695,449) . Furniture, fixture and office equipments 13,302,676 - 13,302,676 9,294,462 501,603 9,796,065 3,506,611 6-15 Vehicles 18,563,302 - 18,563,302 13,671,046 986,869 14,657,915 3,905,387 20-25 Total 2009 1,231,651,571 46,015,604 1,194,971,726 766,366,543 57,415,274 752,137,478 442,834,248 (71,644,339) 13.2 Gross carrying value basis for the year 2008: DEPRECIATION Net book | Annual As at Additions/ As at For the As at value as at | rate of July 1, {deletions) June year June 30, June 30, | deprecia- 2007 2008 (deletions) 2008 2009 tion % Freehold land 5,791,867 - 5,791,867 - - - 5,791,867 Leasehold land 23,538,355 - 23,538,355 1,962,214 235,384 2,197,598 21,340,757 1 Buildings on leasehold land 98,198,625 - 98,198,625 41,808,108 2,819,526 44,627,634 53,570,991 Plant, machinery and ancillary equipments 1,042,296,485 29,960,261 —1,072,256,746 654,802,333 41,773,470 696,575,803 375,680,943 10-15 Fumiture, fixture and office equipments 13,220,376 82,300 13,302,676 8,726,220 568,242 9,294,462 4,008,214 6-15 Vehicles 18,544,167 859,135 18,563,302 12,994,272 1,129,702 14,123,974 4,439,328 20-25 (840,000) Total 2008 1,201,589,875 30,061,696 1,231,651,571 720,293,147 46,526,324 766,366,543 465,285,028 (452,928) : 25eee SSS SSS 88 EE loll 13.3 Net carrying value basis for the year 2009: Net Book Valve Additions Net Book Depreciation Net Book Valve as at at Cost Valve Deletions charge as at July 1, 2008 June 30, 2009 oe ee ee ee eee ne eee eee ene Rupees -----------------------------------+------- Freehold land 5,791,867 - - - 5,791,867 Leasehold land 21,340,757 - - 235,384 21,105,373 Buildings on leasehold land 53,570,991 31,144,089 - 3,457,152 81,257,928 Plant, machinery and ancillary equipments 375,680,943 14,871,515 11,051,110 52,234,266 327,267,082 Furniture, fixture and office equipments 4,008,214 - - 501,603 3,506,611 Vehicles 4,892,256 - - 986,869 3,905,387 Total 2009 465,285,028 46,015,604 11,051,110 57,415,274 442,834,248 13.4 Net carrying value basis for the year 2008: Net Book Valve Additions Net Book Depreciation Net Book Valve as at at Cost Valve Deletions charge as al July 1, 2007 June 30, 2008 tee ee ee eee ee ee eee Rupees +~-------------------------- +--+ ---------- Freehold land 5,791,867 - - - 5,791,867 Leasehold land 21,576,141 - - 235,384 21,340,757 Buildings on leasehold land 56,390,517 - - 2,819,526 53,570,991 Plant, machinery and ancillary equipments 387,494,152 29,960,261 - 41,773,470 375,680,943 Furniture, fixture and office equipments 4,494,156 82,300 - 568,242 4,008,214 Vehicles 5,549,895 859,135 387,072 1,129,702 4,892,256 Total 2008 481,296,728 30,901,696 387,072 46,526,324 465,285,028 13.5 Deletions of property, plant and equipment during the year: Cost Accumulated Net Book Sale Mode of Particulars depreciation value proceeds Disposal wee ee ee ee ee ee eee eee Rupees - ----------------------------------------- Machinery 5,912,492 5,205,744 706,748 976,000 Tender Abdul Majeed Sons D-126 Bawany Challi S.1.T.E. Karachi. Machinery 62,740,789 54,074,953 8,665,836 9,665,000 Tender Mascor Alam H.No.136,Area-F,Korangi No.5 Karachi. Machinery 14,042,168 12,363,642 1,678,526 2,318,000 Tender Muhammad Anwar 2009 82,695,449 71,644,339 11,051,110 12,959,000 Vehicles 840,000 452,928 387,072 450,000 2008 840,000 452,928 387,072 450,000 June 30, June 30, 2009 2008 Rupees Rupees 13.6 The allocation of depreciation is as follows: Cost of Sales 55,932,289 44,828,376 Administrative expenses 1,482,985 1,697,948 57,415,274 46,526,324 2617.1 Note "DEFERRED TAX (Debit)/credit balance arising due to: - accumulated tax losses - staff gratuity - accelerated tax depreciation Net deferred tax LONG-TERM INVESTMENTS - Available for sale Quoted Companies - fair value Pakistan Tobacco Company Limited 5,138 (2008: 5,138) ordinary shares of Rs. 10 each Dawood Lawrencepur Limited 2,329 (2008: 2,329) ordinary shares of Rs. 10 each These Investments are shown at fair values being market values as against cost of Rs. 29,525 (2008: Rs. 29,525). LONG TERM DEPOSITS Trade Deposits in statutory authorities - export Security deposits Margin deposit on bank guarantee 9,313,681 STORES, SPARE PARTS AND LOOSE TOOLS: Stores Spare parts and loose tools Less: Provision for obsolete and slow moving items 17.1 51,807,962 The movement in provision is as follows: Balance at the beginning of the year Add: Charge during the year Balance at the end of the year 27 June 30, 2009 Rupees 226,843 249,086 475,929 684,481 3,902,627 4,726,573 42,776,083 10,545,120 53,321,203 1,513,241 1,513,241 1,513,241 June 30, 2008 Rupees (8,431,849) (272,091) 6,377,901 (2,326,039) 601,146 329,856 931,002 684,481 4,687,509 4,601,118 9,973,108 40,117,206 9,479,872 49,597,078 49,597,07820.1 20.2 20.3 20.4 June 30, ; June 30, 2009 2008 Note Rupees Rupees STOCK-IN-TRADE: Raw materials 9,358,580 12,929,263 Semi-finished goods 374,703,120 465,379,729 Finished goods 413,755,577 323,072,188 788,458,697 788,451,917 797,817,277 801,381,180 TRADE DEBTS Considered good Export (Secured - by way of letter of credit) 273,171,929 191,247,664 Local (Un-Secured) 340,888,279 363,292,799 LOANS & ADVANCES: secured Considered good - Interest free Loans - to executive 20.1 370,000 - - to employees other than executives 20.1 2,459,221 1,708,858 - to contractors 20.2 188,273 181,443 3,017,494 1,890,301 Advances ~ against expenses 1,154,394 227,371 - to employees 20.1 1,704,478 326,800 - to contractors 20.2 3,150,000 - - to suppliers 40,224,629 36,464,193 - against equipment 20.3 1,441,441 - 47,674,942 37,018,364 50,692,436 38,908,665 Loans and advances to employees have been given for the purchase of household equipment and housing assistance in acordance with the terms of employement and are repayable in monthly installment and for a period of not more than twelve months. These are secured against the outstanding balance of gratuity, end of service dues and guarantees by two other employees. Loans and advances to contractors are secured against the outstanding bills of the contractors and guarantees by the two other employees of the Company. These are secured against the letter of credit. The maximum aggregate amount due from the executive at the end of any month was Rs. 370,000 (2008: Nil) 2825, TRADE DEPOSITS & SHORT TERM PREPAYMENTS: Trade Deposits in statutory authorities - export Other deposits Short Term Prepayments OTHER RECEIVABLES: (considered good) Receivable from government authority Insurance claim receivable Fair price shop Others TAX REFUND DUE FROM GOVERNMENT: Duty drawback Sales tax Export quota premium Research and development Income Tax compensation CASH AND BANK BALANCES: Cash in hand Cash at bank in current account - in local currency - in foreign currency SALES: Local Exports Direct export Note June 30, 2009 Rupees 699,488 825,628 812,108 2,337,224 6,247,707 1,808,122 490,373 4,950,192 13,496,394 6,133,306 21,811,540 7,190,063 4,045,593 3,692,549 42,873,051 26,653 1,209,173 70,191 1,279,364 1,306,017 241,911,649 678,635,999 June 30, 2008 Rupees 47,171 85,928 784,108 917,207 119,409 1,812,982 691,236 5,942,025 8,165,652 4,699,737 16,469,107 7,190,062 2,460,010 3,692,549 34,511,465 4,166,598 70,244 4,236,842 4,236,842 468,003,675 450,792,027 Indirect export 468,582,023 167,128,254 1,147,218,022 617,920,281 Add: Duty drawback 6,143,595 3,523,379 1,395,273,266 1,089,447,335 25.1 Export sales include net exchange gain amounting to Rs.9,533,644 (2008: Rs. 31,796,865). 2926,2 26.3 27. June 30, 2009 Note Rupees COST OF SALES: Opening stock of semi-finished and finished,goods 788,451,917 Raw materials consumed 26.1 718,538,703 Processing charges 24,790,073 Fuel and power 183,049,314 Salaries, wages and allowances 98,012,575 Staff benefits 26.2 9,881,352 Store and spare parts consumed 61,534,338 Repairs and maintenance 10,256,607 Insurance 5,458,876 Depreciation 13.6 55,932,288 1,955,906,043 Closing stock of semi-finished and finished goods (788,458,697) 1,167,447,346 - RAW MATERIALS CONSUMED: Opening stock 12,929,263 Purchases 714,968,020 727,897,283 Closing stock (9,358,580) 718,538,703 This includes Rs.392,615 (2008: Rs. 1,065,661) in respect of staff retirement benefits. The break-up of cost of sales attributable to sales is as follows: Local 662,123,067 Export 505,324,279 1,167,447,346 SELLING & DISTRIBUTION COST: Carriage and transport 5,056,726 Export expenses including shipping and other charges 6,344,567 Commission 5,373,192 Freight and Insurance 8,649,984 Advertisement and subscriptions 820,411 Professional charges 656,846 Other expenses 542,914 27,444,640 30 June 30, 2008 Rupees 786,768,403 521,115,187 29,252,770 140,904,495 114,619,396 13,127,996 60,538,190 13,057,865 3,625,802 44,828,376 1,727,838,480 (788,451,917) 939,386,563 11,710,993 522,333,457 534,044,450 (12,929,263) 521,115,187 487,736,528 451,650,035 939,386,563 5,054,947 6,854,268 10,819,355 8,703,595 455,548 634,700 232,075 32,754,48828.1 29 30 Note ADMINISTRATIVE EXPENSES: Staff salaries, wages and allowances Staff benefits 28.1 Rent, rates and taxes Travelling and conveyance Stationery, postage and telephone Depreciation 13.6 Insurance Legal & professional charges Directors’ fees Auditors’ remuneration 28.2 Provision for slow moving/obsolete items 26,908,671 This includes Rs.1,227,282 (2008: Rs.393,303) in respect of staff retirement benefits. AUDITORS’ REMUNERATION: Audit fee Half yearly review Corporate governence review Out of pocket expenses Others 633,700 FINANCE COST: Mark-up on short term borrowings in local currency Mark-up on short term borrowings in foreign currency Mark-up on long term loans in local currency Bank charges 160,852,042 OTHER OPERATING EXPENSES: Workers’ profit participation fund Workers’ welfare fund 1,026,858 31 June 30, 2009 Rupees 12,223,100 1,737,999 1,321,322 4,056,311 2,597,565 1,482,985 845,148 485,800 11,500 633,700 1,513,241 500,000 79,000 20,000 31,200 7,500 112,217,083 647,502 42,298,712 5,688,745 733,470 293,388 June 30, 2008 Rupees 12,323,988 406,036 889,439 4,259,723 2,903,016 1,697,948 454,895 410,200 10,500 216,000 23,171,745 125,000 40,000 10,000 41,000 216,000 81,107,976 505,060 23,770,346 5,249,512 110,632,89431 32 32.1 33 Note OTHER INCOME: Income from financial assets Dividend Income from assets other than financial assets Profit on disposal of property, plant & equipment13.5 Income from others Miscellaneous Taxation Current Deferred - current Deferred - prior Relationship between tax expenses and accounting loss Accounting Profit / (loss) Tncome tax at the applicable war Late of 35% (2008: 35%) Lax ettect of expenses that are not deductible in determining taxable profit Tax charge - turnover/presumptive Adjustment attributable to presumptive tax, lower tax rates and other tax credits EARNINGS PER SHARE: BASIC & DILUTED June 30, 2009 Rupees 29,544 1,907,890 111,387 2,048,821 6,786,360 16,681,515 2,326,039 25,793,914 13,642,530 4,774,886 1,096,598 6,786,360 13,136,070 25,793,914 There is no dilutive effect on the basic earnings per share of the Company, which is based on: Loss after taxation Weighted average number of Ordinary shares Loss per share - Basic & diluted 32 (12,151,384) June 30, 2008 Rupees 25,433 62,928 110,081 198,442 6,800,000 (5,022,588) 1,777,412 (16,299,913) (5,704,970) 1,324,747 6,800,000 (642,365) 1,777,412 (18,077,325) (Number of shares) 10,625,852 (1.14) 10,625,852 (1.70)oon 34 34.1 35 June 30, 2009 Note Rupees CASH GENERATED FROM OPERATIONS: Profit / (loss)before taxation 13,642,530 Adjustment for non cash charges and other items: Depreciation 57,415,273 Profit on disposal of fixed assets (1,907,890) Provision for staff gratuity 1,619,897 Dividend income (29,544) Financial charges 160,852,042 Working capital changes 34.1 (378,077,248) (160,127,470) (146,484,940) Working Capital Changes (Increase)/decrease in current assets Stores, spares and loose tools (2,210,884) Stock-in-trade 3,563,903 Trade debts (59,519,745) Loans, advances (11,783,771) Trade deposits and short term prepayments (1,420,017) Other receivables (5,330,742) Refunds due from government (8,361,586) (85,062,842) Increase/(decrease) in current liabilities Trade and other payables (net) (293,014,406) (378,077,248) CASH AND CASH EQUIVALENTS: Cash and cash equivalents comprise of the following items as included in the balance sheet: Cash and bank balances 24 1,306,017 Short-term borrowings 10 (165,162,349) (163,856,332) 33 a June 30, 2008 Rupees (16,299,913) 46,526,324 (62,928) 672,358 (25,433) 110,632,894 87,932,929 245,676,144 229,376,231 (5,533,644) (1,317,784) (16,134,429) (144,334) (393,030) 6,492,163 (17,031,058) 104,963,987 87,932,929 4,236,842 (174,096,353) (169,859,511)36.1 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES & TRANSACTIONS WITH RELATED PARTIES: The aggregate amounts charged in the accounts for the year, for remuneration including benefits, to the Chief Executive, Directors and Executives of the Company were as follows: 2009 2008 _ Chief Directors Executives Chief Directors Executives Executive Executive ween ene n en ee ene Rupees ---------------- ~-roreeresre---- Rupees ---------------- Fees - 11,500 - - 10,500 - Managerial remuneration 268,765 1,227,600 268,765 - 1,227,600 Housing 96,000 - 1,184,355 96,000 - 1,184,355 Utilities 345,740 1,490,790 345,740 ~ 1,490,790 710,505 11,500 3,902,745 710,505 10,500 3,902,745 Number 1 6 5 1 6 5 In addition, the Chief Executive and Directors are provided with free use of the Company’s cars. TRANSACTIONS WITH RELATED PARTIES: There are no transactions with related parties. Furthermore, there are no transactions with key management personnels other than under the terms of employeement as disclosed in note 36.1 and 20.1. FINANCIAL INSTRUMENTS AND DISCLOSURE: Financial Assets and Liabilities: Interest/Mark-up/Profit Bearing Non-Interest/Non Mark-up/Profit Beari Maturity — Maturity Maturity Maturity Total Effective upto one after one upto one after one Rate of year year Subtotal year year Subtotal Interest/ 2009 Mark-up we ee eee Rupees ------------------------------------ Male... Financial Assets Investments - - : - 475,929 475,929 475,929 Deposits : - - 1525,116 9,313,681 10,838,797 10,838,797 Trade debts - - : 614,060,208 - 614,060,208 614,060,208 Loans & Advances - - - 50,692,436 - 50,692,436 50,692,436 Other Receivables - - - 490,373 - 490,373 490,373 Tax refunds due from government —- - : 42,873,051 - . 42,873,051 Cash and bank balances . - - 1,306,017 . 1,306,017 1,306,017 95,361,877 - 666,549,034 709,422,085 Financial Liabilities Long term finance 248,817,578 99,754,692 348,572,270 - - - 348,572,270 7% to Short term borrowings 899,683,135 - 899,683,135 : : : 899,683,135 3 Months KIBOR + 1% Trade and Other payables 733,470 - . 316,108,751 - 316,108,751 316,108,751 Accrued Mark-up - 35,491,232 - 35,491,232 35,491,232 1,148,500,713 99,754,692 1,248,255,405 351,599,983 - 351,599,983 1,599,855,388 3437.2 Fy som leh Financial Assets and Liabilities: Interest/Mark-up/Profit Bearin Maturity Maturity upto one after one year year Subtotal Financial Assets Investments Deposits Trade debts - Loans & Advances - Other Receivables Tax refunds due from government Cash and bank balances - - Financial Liabilities Long term finance 133,878,270 84,448,692 218,326,962 Short term borrowings 707,844,686 - 707,844,686 Trade and Other payables . . Accrued Mark-up - - - Effective Rate of Interest/ Mark-up 7% to 12.75% Non-Interest/Non Mark-up/Profit Bearin Maturity Maturity Total upto one after one year “year Subtotal 2008 Rupees ------------------------------------i88-- 931,002 931,002 931,002 133,099 9,973,108 10,106,207 10,106,207 554,540,463 554,540,463 554,540,463 38,908,665 38,908,665 38,908,665 691,236 - 691,236 691,236 34,511,465 : 34,511,465 4,236,842 4,236,842 4,236,842 598,510,305 10,904,110 11,037,209 643,925,880 - 218,326,962 - - 707,844,686 609,827,074 609,827,074 609,827,074 12,238,337 - 12,238,337 12,238,337 622,065,411 622,065,411 — 1,548,237,059 841,722,956 84,448,692 926,171,648 Financial risk management objectives The Company's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company's overall risk management programme focuses on the unpredictability of financial markets and seek to minimize potential adverse effects on the Company's financial performance. Risk Management is carried out under policies and principles approved by the Board. All treasury related transactions are carried out within the parameters of these policies and principles. Market risks Market risk refers to fluctuation in value of financial instruments as a result of changes in market prices. The company manages market risk as follows: a Foreign exchange risk management Foreign exchange risk represents the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Foreign exchange risk arises mainly from future economic transactions or receivables and payables that exist due to transaction in foreign exchange. 35The Company's exposure denominated in foreign currency is given below: June 30, June 30, 2009 2008 Rupees Rupees Trade debts 273,171,929 191,247,664 Advance from customers 15,551,694 - Bank Balances 70,191 70,244 Short term borrowings 9,536,786 6,875,333 Markup there on 166,238 160,952 The Company exposed to foreign exchange risk arising from currency value fluctuations primaril with respect to the United States Dollar (US$), Euro, Pounds and Canadian Dollar (C$) currently, the Company's foreign exchange risk exposure in relation to foreign trade transactions. b Price risk Price risk represents the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest or currency rate risk), whether those changes are caused by factors specified to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The Company is presently not exposed to any significant price risk. The Company is exposed to price risk from its operating and certain other activities and the Company's price risk exposures are evaluated under the following headings: FOR PURCHASES ii ili iv Cotton If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 850,000 (2008: 950,000) higher/lower. Cotton Yarn If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 1,075,000 (2008: 1,275,000) higher/lower. Polyester Yarn If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 75,000 (2008: 75,000) higher/lower. Polystaple Fibre If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 4,000,000 (2008: 2,700,000) higher/lower. Polyester Cloth | If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 638,000 (2008: 258,000) higher/lower. Cotton Cloth If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 611,000 (2008: 122,000) higher/lower. 36vii Vili Furnance oil If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 10,000 (2008: 10,000) higher/lower. Fuel and Power If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 1,830,493 (2008: 1,409,045) higher/lower. FOR SALES - LOCAL ili vi vil Yarn if the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 6,580,000 (2008: 5,900,000) higher/lower. Cloth - Cotton If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 47,000 (2008: 12,500) higher/lower. Cutting Range & Rags If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs.7,002 (2008: 2,323) higher/lower. Cotton Softwaste If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 3,648 (2008: 2,342) higher/lower. Polyester Cotton Softwaste If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs.3,779 (2008: 4,020) higher/lower. Services-Pritning If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 15,637 (2008:12,462) higher/lower. Services-Dyeing If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 12,244 (2008: 3,578) higher/lower. FOR SALES - EXPORT il Textile Madeups If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 6,470,000 (2008: 3,760,000) higher/lower. ReadyMade Garment If the price is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 380,000 (2008: 780,000) higher/lower. 3737.3.1 37.3.2 37.3.3 Interest / markup rate risk management Interest rate risk is the risk that the value of financial instruments will fluctuate due to change in the interest / markup rates. The Company has long term finance and short term borrowings at fixed and variable rates. The Company is exposed to interest / markup rate risk on long term financing and short term borrowings. — Financial assets include balances of Rs.Nil (2008:Nil) which are subject to interest rate risk.Financial liabilities include balances of Rs. 1,248,255,405 (2008:926,171,648) which are subject to interest rate risk. Applicable interest rates for liabilities are given in respective notes. Financial Liabilities: If interest rate is fluctuated by + 1 % with all other variables held constant, profit after tax for the year would have been Rs. 1,551,633 (2008: 1,053,833) higher/lower. Credit risk Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties failed to perform as contracted. The Company manages credit risk interalia by setting out credit limits in relation to individual customers and / or by obtaining advance against sales and / or through letter of credits and/or by making providing for against doubtful debts. Also the company doesn't have significant exposure in relation to individual customer. Consequently the company believes that it is not exposed to any major concentration of credit risk. The Company is exposed to credit risk from its operating and certain investing activities and the Company's credit risk exposures are categorised under the following headings: Trade debts Trade debts are essentially due from local and foreign companies and the company does not expect that these companies will fail to meet their obligations. Bank Balances The Company limits its exposure to credit risk by investing in liquid securities and maintaining bank accounts only with counterparties that have stable credit rating. Given these high credit ratings, management does not expect that any counter party will fail to meet their obligations. Exposure to credit risk: The carrying amount of financial assets represents the maximum credit exposure, The maximum exposure to credit risk at the reporting date was: June 30, June 30, 2009 2008 Rupees Rupees Long term Investments 475,929 931,002 Long Term Deposits 9,313,681 9,973,108 Trade debts 614,060,208 554,540,463 Loans & Advances 50,692,436 38,908,665 Trade Deposits 2,937,224 917,207 Other Receivables 13,496,394 8,165,652 Tax refunds due from government 42,873,051 34,511,645 Bank balances 1,279,364 4,236,842 38ii ili 37.4 Financial Assets That Are Neither Past Due nor Impaired The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to historical information and external ratings or to historical about counter party defauit rates: June 30, June 30, 2009 2008 Rupees Rupees Long term deposits © Customer with no default in the past one year 9,313,681 9,973,108 Trade debts Customer with no default in the past one year 614,060,208 554,540,463 Loans and advances Customer with no default in the past one year 50,692,436 38,908,665 Trade deposits Customer with no default in the past one year 2,337,224 917,207 Other receivables Customer with no default in the past one year 13,496,394 8,165,652 Tax refund due from government Customer with no default in the past one year 42,873,051 34,511,465 Bank Balances Customer with no default in the past one year 1,279,364 4,236,842 Financial Assets That Are Either Past Due or Impaired The credit quality of financial assets that are either past due or impaired can be assessed by reference to historical information and external ratings or to historical about counter party default rates: Long term Investments The impirment of long term investments at the reporting date was: Opening Balance 931,002 977,964 Less:Impirment (as disclosed in changes in equity) 455,073 46,962 475,929 931,002 Liquidity risk Liquidity risk represent the risk where the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company manages liquidity risk by maintaining sufficient cash and ensuring the fund availability through adequate credit facilities. At June 30, 2009, the Company has Rs. 1,038,750,000 available borrowing limit from financial institution.Unutilized borrowing facilities of Rs. 899,683,135 and also has Rs. 1,279,364 being balances at banks. Based on the above, management believes the liquidity risk to be insignificant. 3937.5 38 Fair value of Financial instruments Fair value is an amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arm's length transaction. Consequently, differences may arise between the carrying values and the fair value estimates. The carrying values of all the financial assets and liabilities reflected in the financial statements approximate their fair values except those which are described in respective policy notes. Capital risk management The primary objective of the Company when managing capital are to safeguard the company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure. The Company manages its capital structure and makes adjustment to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. During the year the Company's strategy was to maintain leveraged gearing. The gearing ratios as at June 30, 2009 and 2008 were as follows: June 30, June 30, 2009 2008 Rupees Rupees Total borrowings 899,683,135 707,844,686 Less : cash and bank balances 1,306,656 4,236,842 Net debt 898,376,479 703,607,844 Total equity 384,797,878 397,404,335 Capital Gearing ratio 42.83% 56.48% The Company finances its operations through equity, borrowings and management of working capital with a view to maintain an appropriate mix amongst various sources of finance to minimize risk. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS: The preparation of Financial Statements in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the company's accounting policies. Estimates and judgments are continually evaluat and are based on historic experience and other factors, including expectations of fu events that are believed to be reasonable under the circumstances. Revision to accounting estimate is recognized in the year in which the estimate is revised and in any future year efffected. In the process of applying the company's accounting policies, management has made the estimates and judgment which are significant to the Financial Statements. 40iioen 38.1 Property,Plant and Equipment : The company has made certain estimation with respect to residual value, depreciation method and depreciable tives of property,plant and equipment .Further,the company reviews the value of assets for possible impairment on each financial year end.Any the estimates in future years might effect the remainning amounts of respective items property,plant and equipments with a corresponding effect on the depreciation charge and impairment. 38.2. Income Taxes: In making the estimates for the income taxes payable by the Company, the management considers current income tax law and the decisions of appellate authorities on certa cases issued in past. 38.3. Future Estimation of Export Sales: Deferred tax calculation has been made based on estimate of future ration of export based on past history and local sales. 38.4 Provision of obsolescence: Provision of Obsolescence and slow moving spare is based on parameters set out by management. 38.5 Contingencies: Contingencies are evaluated based on the element of issue involved and opinion of legal counsel. 38.6 Stock in Trade: Net realizable value of stock in trade is obtained from prevailling rates and estimate of expenses to be incurred thereon. 39 CAPACITY AND PRODUCTION: June 30, June 30, 2009 2008 Rupees Rupees 39.1 Yarn Number of spindles installed 50,808 50,808 Number of spindles worked 39,421 41,665 Production capacity - kgs 10,444,684 10,444,684 Production of yarn after conversion into 20 count - kgs 8,213,988 7,900,679 Number of shifts worked per day Three Three 39.2 Cloth Against the production capacity of 7,154,025 square metres of cloth, the actual production during the year (2009) was 7,693,847 (2008: 7,627,748) square metres. The production capacity as stated above was assessed by the management. The shortfall in production of yarn is mainly due to non-availability of qualitiy cotton. 4]41 42 CORRESPONDING FIGURES: For better presentation reclassification / rearrangements made in the financial statements are as follows: Trade and other payables Reclassification from component Trade and other payables Workers welfare fund Trade creditors Trade creditors - others Trade deposits & short term prepayments Loan to employees Long term deposits Deposits Advances against expenses to employees Trade deposits & short term prepayments Deposits Other receivable Cash and bank balances In local currency current account Other operating expenses Long term loans LTF - EOP TF - V/ Accrued Mark up Markup accrued on foreign currency short term borrowings Short term borrowings Short term borrowings local currency Sales Direct export Finance cost Mark up on foreign and local currency term financing Mark-up on short term borrowings in foreign currency Reclassification to component Accrued liabilities Advances from customers Advances from customers Long term deposits _ Loan to contractors Margin deposit on bank guarantee Security deposits Advance against expenses Trade deposits with statutory authorities Tax refund due from government In foreign currency current account Administrative expenses LTF - EOP II TF II Markup accrued on foreign currency short term borrowings Running finance Export refinance Finance against foreign bills Duty draw back Mark-up on short term borrowings in local currency Mark-up on long term loans in local currency Bank charges Other operating expenses Mark-up on short term borrowings in local currency Directors fees and Auditors' remuneration DATE OF AUTHORIZATION FOR ISSUE: These financial statements were authorized for issue on October 10, 2009 by the Board of Directors of the Company. GENERAL: 42.1 Figures have been rounded off to the nearest rupees. Aziz L. Jamal Chairman & Chief Executive Amount 3,329,824 1,766,880 48,955,612 684,481 181,443 4,601,118 4,687,509 227,371 47,171 34,511,465 70,244 226,500 81,127,000 15,429,516 160,952 174,096,353 461,000,000 95,873,000 6,143,595 112,217,083 647,502 42,298,712 419,200 226,500 Akhtar Wasim Dar Director 42PATTERN OF HOLDINGS OF THE SHARES HELD BY THE SHAREHOLDERS AS AT JUNE 30, 2009 NO. OF SHAREHOLDERS SHAREHOLDING TOTAL SHARES HELD 530 1 to 100 11,795 222 101 to 500 56,110 49 501 to 1000 33,982 65 1001 to 5000 150,271 15 5001 to 10000 98,065 5 10001 to 15000 56,888 2 15001 to 20000 37,325 2 20001 to 29000 46,589 1 25001 to 30000 25,302 2 40001 to 45000 87,173 1 45001 to 50000 50,000 1 50001 to 55000 50,500 3 55001 to 60000 172,089 6 60001 to 65000 373,883 1 79001 to 80000 79,824 1 85001 to 90000 88,018 1 130001 to 135000 134,773 1 160001 to 165000 161,638 1 240001 to 245000 243,424 1 300001 to 305000 304,887 1 380001 to 385000 381,331 1 405001 to 410000 408,541 J 615001 to 620000 616,496 1 1220001 to 1225000 1,223,693 1 1280001 to 1285000 1,280,832 1 2185001 to 2190000 2,185,964 1 2270001 to 2275000 2,270,499 917 10,625,852 43CATEGORIES OF SHAREHOLDERS AS AT JUNE 30, 2009 CATEGORIES OF SHAREHOLDERS NOS 2009 SH_HELD Assocated Companies - - Undertaking and related parties NIT AND ICP 2 211 National Bank of Pakistan trustee deptt. . 37 Inv.Corporation of Pakistan 174 CEO . 1 1,272,193 Mr. Aziz.L.Jamal 1,272,193 DIRECTOR 6 1,668,675 Mr.Rashid.L.Jamal 1,343,879 Mr.Husein Jamal 154,489 Mr.Ahsan Jamal 71,354 Mr.Akhtar Wasim Dar 4,791 Mrs. Aisha Bai Sulaman 75,824 Miss. Hina Abdul Rashid 18,338 EXECUTIVES - - BANKS, DEVELOPMENT FINANCIAL INSTITUTIONS, NON BANKING FINANCIAL INSTITUTIONS, INSURANCE COMPANIES, MODARABAS AND MUTUAL FUNDS: Banks 6 979 444 Insurance Companies 3 867,017 Modarabas 2 42,025 Investment Companies 2 1,006,892 Business Institutions 4 1,729 Joint Stock Companies 11 106,784 Charitable Institutions 2 624,763 Abandoned Properties 1 1,560 Trade Association 1 1,839 trust 4 345,939 SHAREHOLDERS HOLDING TEN PERCENT OF MORE VOTING INTEREST IN THE COMPANY Husein Ebrahim Foundation 1 2,185,964 INDIVIDUALS 871 1,520,817 917 = 10,625,852 12.65 1.45 0.67 0.05 0.71 0.17 PERTG. 0.00 11.97, 15.70 9.22 8.16 0.40 9.48 0.02 1.00 5.88 0.01 0.02 3.26 20.57 14.31 100.00ATTENDANCE AT THE BOARD MEETINGS DURING THE YEAR 2008-2009 Name of Director Mr. Aziz L. Jamal Mr. Rashid L. Jamal Mr. Husein Jamal Mrs. Aisha Bai Suleman Mr. Ahsan Jamal Mr. Akhtar Wasim Dar Miss. Hina Abdul Rashid 45 Total No. of Board Meetings 4 4 No. of Meetings attended 3 3KEY OPERATING & FINANCIAL DATA FROM 2003-2004 TO 2008-2009 Description Sales - Net Cost of Sales Gross Profit Operating profit/(loss) Profit/(loss) before Tax (Loss)/profit After Tax Paid up Capital Current Assets Current Liabilities Dividend July-June 2008-2009 1395,273,266 1,167,447,346 227,825,920 173,472,609 4,609,986 (12,151,384) 106,258,520 1574,390,569 July-June 2007-2008 1,089,447,335 939,386,563 150,060,772 (16,498,355) (16,299,913) (18,077,325) 106,258,520 1,492,943,033 1,365,081,316 1,428,432,764 46 July-June 2006-2007 1,159,056,352 996,015,808 163,040,544 (8,576,128) (8,395,804) (18,758,154) 106,258,520 1,476,489,928 1,320,464,279 Oct-June 2005-2006 1,028,202,043 905,672,410 122,529,633 (9,796,872) (8,984,278) 1,029,925 106,258,520 Oct-Sep. 2004-2005 908,435,563 776,795,011 131,640,552 35,361,021 36,909,754 21,793,889 106,258,520 1,197,447,311 1,292,814,889 1,019,323,803 1,354,845,081 10,625,852 Oct-Sep. 2003-2004 1,628,588,233 1,422,830,133 205,758,100 52,512,116 54,929,064 48,438,793 106,258,520 1,196,272,693 1,231,102,110 21,251,704PROXY FORM I/We of being member(s) of Husein Industries Limited and holder(s) of ordinary shares vide Members L.F, No. hereby appoint Mr. / Mrs. / Miss. Members L.F. No. or failing him or her Mr. / Mrs. / Miss ! Members L.F. No. as my proxy in my absence to attend and vote for me and on my behalf at the 56th Annual General Meeting of the Company to be held on October 31, 2009 and at any adjournment thereof. As witness my hand this day of 2009. Revenue Stamp Signature (Signature should agree with the specimen signature registered with the Company) Note: A proxy in order to be valid must be received at the Registered Office of the Company not later than 48 hours before the meeting.